How Divorce Could Affect Your Retirement PlansBy Content |
Today, more and more couples are filing for divorce in the second half of their lives. This concept is referred to as “gray divorce”. In fact, Pew Research discovered that the divorce rate among adults 50 and older rose 109%. How divorce affects your retirement plans depends on many different factors including how intertwined your assets are with your spouses. Couples should be aware that splitting later in life may require them to rethink their retirement plan because of the reasons below:
Assets May Be Fixed
When couples divorce in their 50s or 60s, the time to adequately prepare for retirement may be less, or you may already be retired. If assets are not continuing to grow or you are on a fixed income, it may be especially important to ensure that property is divided equitably.
New Jersey is an equitable distribution state, meaning assets are divided fairly, not necessarily equally. First, the court must determine what assets should be divided. Typically, this is any value accrued during the marriage. The court will look at various factors such as age, duration of the marriage, and how much income each spouse brought to the union when assets are being split up.
Costs of living separately
Life can certainly be expensive, and if you have been living with a partner for some time, the cost of living alone may be surprising. Between health insurance and other living expenses, your bills could stack up. Couples often come to an agreement on how to split assets and are unable to live sufficiently. Couples who discover they have insufficient funds to operate a household on their own may need to reevaluate their retirement plans. Unfortunately, it may be necessary to push your retirement back or return to the workforce if there are financial concerns with your gray divorce.
Custody and issues related to your children
In general, gray divorce rarely involves extensive custody issues, and children are often adults at the time of the marriage ending. However, if there are children that still require financial help, there may be child support orders from a court. Child support orders are likely to have a large impact on your financial situation and should be accounted for when you are planning for your retirement after a gray divorce.
If you are considering a divorce later in life, the attorneys of Moskowitz Law Group could advise you and your spouse to work together as this will help ensure that both of your wishes are carried out. Divorce can happen at any point in life, so call today to get started on your divorce.